New York City Ushers In Sub-Metering Rule

June 4, 2015 By Marc Karell

Marc Karell

New York City’s Local Law 88 is now in effect. This rule contains requirements for buildings that are 50,000 square feet or greater to upgrade their lighting and to install sub-meters. A future article will discuss lighting, but this one will discuss sub-meters. New York City is one of the first cities in the nation to require sub-metering.

Urban Green Council has been leading the way to educate NYC building owners and managers about LL 88 and to guide them on how to best comply. Representing UGC is Ms. Bonnie Hagen, LEED-AP, who can speak to your company or group about the law at no charge. She may be contacted at bonnie@brightenergyservices.com.

Many buildings, particularly those with multiple tenants, whether commercial or residential, have only a master electric meter or a small number of electric meters. To save money for meter and wiring operations and maintenance, many buildings maintain only a single master electric meter and charge tenants for their electric use in a variety of ways such as a flat fee which is independent of actual electric usage or on a formula based on the square footage of the building. Paying a set fee for electricity no matter how much one uses is a disincentive to be energy efficient or to otherwise conserve. In fact, this is punishing the people who do conserve electricity because they believe it’s the right thing to do.

Many anecdotes exist of the residents who leave their air conditioners on all day even though nobody is home so that their apartment is cool when they get home; they pay no extra fee for this luxury, yet this is a great waste of energy. Also, many stories have been shared about how people — once sub-meters are installed — who now have to pay based on their actual measured usage, scream when they see their first bill, and then go out and buy more efficient lights and, of course, do not leave on their AC all day anymore. Several reports indicate that this effect causes a decline in electricity usage and a demand reduction averaging about 30 percent. This was the motivation for New York City to promulgate this rule in their effort to become more energy efficient and reduce the future infrastructure upgrades of unbridled demand.

LL 88 requires all large commercial buildings (greater than 50,000 square feet) to install sub-meters for its tenants who lease at least 10,000 sq. ft. by Jan. 1, 2025. While this deadline may seem far away, it really is not, given that many commercial leases are 10 years long. Now is the time to adjust a lease to account for sub-meters. LL 88 does not require the landlord or building manager to charge a tenant for electricity based on the readings of the installed sub-meter; it may continue to just charge the way it has done so in the past. However, the sub-meters must be in place by then and tenants informed monthly of actual electricity usage. The landlord can decide how it installs sub-meters, whether install all of them at once, although that may be a bit disruptive of tenant operations, or as space is available (as each tenant moves out).

In addition to the improvement in energy efficiency that will result from installing sub-meters, it is anticipated that sub-meters will also reduce landlord-tenant disputes. For example, if a group of tenants share a meter and are assessed a share of the costs based on square footage, that may be unfair to a simple office which may have only operate lights and a few desktop computers if they pay proportionally to a user with specific energy-using equipment or situations, like refrigerators and freezers, more lights, and those being on much longer than 9 to 5, etc. Sub-meters will more accurately determine electricity usage so there is a fairer distribution of costs and fewer disputes.

Marc Karell is owner of Climate Change & Environmental Services. CCES has the experts to help your building prepare and comply with LL 88 (as well as the other Local Laws pertaining to energy, LL 84 and LL 87). Even if your building is not in New York City or is under the threshold, it is likely in your interest to install sub-meters and upgraded lights, and we can help you do it with minimal disruption and to achieve maximum financial benefits. Contact us today at 914-584-6720 or at karell@CCESworld.com.

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